Humana (HUM) fell ~8% in the premarket on Wednesday as the company, with its Q4 2025 results, projected a lower-than-expected outlook for 2026, following similarly disappointing guidance issued by its managed care rivals, including UnitedHealth (UNH) and CVS Health (CVS).
In late January, UnitedHealth (UNH), the number one player in the Medicare Advantage market, dropped nearly 20% after the Eden Prairie, Minnesota-based health insurer projected 2026 revenue well short of Street forecasts.
On Tuesday, CVS Health (CVS), the operator of health insurer Aetna, closed lower despite posting a double beat with its Q4 2025 results, as the company’s reaffirmed earnings outlook fell short of analysts’ expectations at the midpoint.
Humana (HUM), the number two player in the MA market, on Wednesday posted $17.14 of adj. EPS for 2025 but estimated at least $9.00 of adjusted EPS for 2026 compared to $12.00 in the consensus.
The Louisville, Kentucky-based firm cited an impact from a decline in Medicare Star Ratings, which it said will hurt its 2026 quality bonus payments paid by Centers for Medicare & Medicaid Services (CMS) for top-rated healthcare plans.
“We continue to feel good about our consumer-focused strategy and our individual Medicare Advantage membership growth in 2026, which will allow us to build for the future with even better outcomes and experiences,” CEO Jim Rechtin said.
However, Humana (HUM) posted $32.6B in revenue for the quarter with ~12% YoY growth, exceeding the consensus by $630M, while its adj. net loss per share rose ~83% YoY to $3.96, still beating Street estimates by $0.03.
The company said its benefit ratio for the insurance segment stood at 93.1% in Q4, indicating an increase of 100 bps, and it expects the ratio to reach 92.50% – 93.00% in 2026 amid a roughly 25% YoY growth in Medicare Advantage memberships thanks to new sales and other factors.